Ladies and gentlemen, good day and welcome to the Relaxo Footwears Limited Q4 FY 2026 financial results, hosted by IIFL Capital Services Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sameer Gupta from IIFL Capital Services Limited. Thank you, and over to you sir.
Thanks, Gitesh. Good evening, everyone. At IIFL Capital, it is our pleasure to host the management of Relaxo Footwears. From the management, we have Mr. Ramesh Kumar Dua, Chairman and MD; Mr. Gaurav Kumaar Dua, Co-CEO and Whole-time Director; Mr. Ritesh Dua, Co-CEO; and Mr. Sushil Batra, Executive Director. We also have Mr. Ankit Jain, Company Secretary and Compliance Officer. Without taking more time, let me hand it over to Mr. Ankit Jain for the opening remarks. Over to you, Mr. Ankit.
Thank you, Sameer, for the introduction. Myself, Ankit Jain, Company Secretary and Compliance Officer of the company. Good evening, everyone, and thank you for joining us on Q4 and FY 2026 earnings call. We appreciate your continued interest in our company, and we are pleased to walk you through our operational and financial performance for the quarter and financial year ended on 31st March 2026. The earnings release and investor presentation are already available on the stock exchange website and our website for your reference. Before we move into Q&A session, I would like to highlight some of the key performance metrics for Q4 and FY 2026. Revenue from operation stood at INR 751 crores in Q4 FY 2026, as against INR 695 crores in Q4 FY 2025, an 8.1% year-over-year growth.
The revenue growth was driven by a strong volume growth amidst a recovery in general trade channel, alongside continued growth in retail, e-commerce, and large format retail channel. EBITDA for the quarter stood at INR 124 crores, registering a growth of 10.6% year-on-year. EBITDA margin was at 16.5% in Q4 FY 2026 as compared to 16.1% in Q4 FY 2025. The growth was supported by continued focus on operational efficiencies, back-end optimization initiatives, and prudent cost management measures undertaken by the company despite the dynamic industry environment. Profit after tax for Q4 FY 2026 stood at INR 68 crores compared to INR 56 crores in Q4 FY 2025, registering a growth of 20.4% year-on-year. PAT margin expanded by 92 basis points year-on-year to 9%, reflecting the company's sustained focus on profitable growth.
For FY 2026, revenue from operation stood at INR 2,702 crores as compared to INR 2,790 crores in FY 2025. EBITDA for FY 2026 stood at INR 374 crores, while EBITDA margin stood at 13.8% in FY 2026. Profit after tax for FY 2026 stood at INR 179 crores as compared to INR 170 crores in FY 2025, with an increase of 5.3% year-on-year growth. PAT margin in FY 2026 stood at 6.6% in FY 2026 as compared to 6.1% in FY 2025. Now going forward, while the momentum exiting FY 2026 is encouraging, we must tread with caution due to the uncertain external environment amidst the ongoing geopolitical situation causing inflationary pressure, which could affect consumer sentiment. While the company has recently taken some calibrated price increases to offset input cost inflation, the full impact on demand and consumption pattern is still evolving and requires close monitoring.
To conclude, while we are cautious about the near-term environment, we remain constructively optimistic about FY 2027 performance. We are committed to deliver a sustainable performance. Thank you. You may please open the floor for questions now. Over to you, Sameer.
Thank you. Thank you very much. We'll now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Archana Gude from IDBI Capital. Please go ahead.
Hi, sir.
Sorry to interrupt. Ma'am, your voice is not audible. Archana, ma'am, can you hear me? Sorry, ma'am, is the line has got disconnected. I'll take the next participant. The next question is from the line of Avinash Karumanchi from MOFSL. Please go ahead. I'm sorry, the line got disconnected. The next question is from the line of Sameer Gupta. Please go ahead.
Hi, thanks for taking my question. Firstly, sir, how should one read this result? There has been a GST rate reduction wherein there was downstocking in the previous quarter. There would have been some upstocking this quarter. Also, distributor count, if I see your presentation, has gone up from 550 last quarter to 630 this quarter. If you adjust for these impacts, or let me put it this way, if you can give any indication on growth at the retail level, it would be helpful for us to understand the exact quantum of growth which is going on.
Hi, Sameer. You have correctly said that there was quite optimism in the market in quarter four. As you have mentioned, the GST from 12% became 5%, and distributors were carrying the stocks. Now, more or less stock has been liquidated through the pipeline and we are seeing a good recovery in quarter four.
Let's say you have reported an 8% growth, but this would also include distributor taking stock, filling their inventory. Last quarter was zero, so suffice to say that the actual normal growth rate is somewhere in between 4%?
The full impact we started seeing after December onwards. You can definitely say that 5%-6% we were able to grow into quarters.
Got it, sir. That explains. Second, sir, I think Ankit mentioned this in his opening remarks. West Asia impact. First of all, input cost inflation, if you could quantify what kind of input cost inflation you are facing in your cost basket.
Input cost is on both sides. One is material, which is affecting everyone. In those few states, labor cost has also increased by government. We are working on that. Raw material prices are again settling down and coming down also. We are working with the overall impact, how much it will impact. Definitely it's a substantial impact which we are foreseeing. We have passed on this to the price increase majorly. Things should be more or less at par with the cost increase. Let's see how it works.
Sir, one, if you could quantify the inflation. let's say if your cost was 100 in the previous quarter in 4Q, where is it trending today? Is it 110? Is it 105? Labor cost I can understand. Second is that what kind of quantum of price hikes have you passed on?
Sameer, we have taken two to three price increase in the market. It was a gradual increase. Some was because of raw material, and one was because of the labor, which increased in Haryana. Roughly around 15%-18% is the increase. In some category, it is lesser, in some category, it is more. We have to calibrate what can be passed on in the market, and took the call.
On a blended level, you have taken a 15%-18% price increase at a consumer level.
Correct. You're right.
Your cost increase would be roughly similar?
Around 12%-15%, I think, will be the price increase, including, I think, all states and all material on the cost of goods manufactured. That's what we are expecting. Plus labor cost.
You have taken a higher price increase versus the cost inflation?
No, no. It's the price increase on the FCG at the blended rate. Cost of goods which we are manufacturing, there is a price increase on both sides. One is the labor side, which is almost around 25%-30% price increase on the labor in one state. In other state, it's around 10%-15%. It's a mix of all these things. That is the one part increase in the cost. Material cost, which went up like anything. INR 120 went up to INR 240, INR 250, like that. Now things are settling and coming down. Overall, we have to review everything. Price increase as on date, because we had inventory, so that material impact was not much in first month, at least, April. Labor definitely it has increased. It's a mix of so many things.
We can say around 15%-20% increase will be there overall on the cost side as on date.
Okay, got it. 15%-20% is the increase on cost side, and you have passed it on to the consumer entirely, so your margin is protected in a way.
Yes, that is the intent, and we are trying to. Yes.
Got it, sir. I'll come back in the queue for follow-ups. Thanks a lot.
Thank you. The next question is from the line of c Please go ahead.
Hi, sir. Thank you once again, and apologies for network issues. I've got three questions. Firstly, sir, can you give us some understanding on what has really changed post this GST 2.0 in terms of competitive intensity and demand front?
Archana, we have mentioned before that the GST came from 12% to 5%. Branded players, we became more competitive in the market. The taxes came down, it helped the organized players. Secondly, there was a good demand recovery in quarter four at consumer level. Because of these two factors, we could see the growth level coming back.
Sir, has the demand continued for the first two months for Q1, or you see some subdued purchase here and there?
It's too early to say, but definitely April and May was better. May is still going on, and let us see how June goes.
Okay. Sir, earlier we spoke about product premiumization by getting into sneakers and maybe high-value Flite portfolio. How's that going on, sir? How has been the response, and any new products which can aid to margin expansion on the cards?
Definitely, we are wiping our premium playbook and through sneakers and offering lifestyle-led products. Our main objective is that we do not have to lose the relevance in mass category. Plus, we have to premiumize. We are making our product mix accordingly.
Anything planned for FY 2027 or it's still in progress?
This is a continuous process, premiumization.
Like we have discussed before also that we are coming up with the athleisure range, and we are coming with a more price point. For example, in Sparx, it was shoes in INR 999-INR 1,700. Now we are thinking how we can offer more product at INR 2,500 also.
Right.
The price range and the premium products will be increasing.
Right. Sir, lastly, any guidance on CapEx for this year and next year?
CapEx, we incurred around INR 130 crores last year.
The next year also. This year INR 200 crores. Last year we incurred around INR 130 crores. Next year we have planned around INR 180 to INR 200 crores.
That covers for next year.
Okay. That will be used for basically the existing capacity and not for any new capacity addition, right?
It will be a mix of both because it's a big amount we spent upon the mold. It's not an increase of capacity. Then we are making one, I think, administrative office also. Some money will go there.
Some wear and tear and some changes in the means. There is no big capacity expansion, definitely. Good amount we spent on the mold side also.
Sure, sir. Sir, thank you so much. I will come back again in the queue. Thank you, sir.
Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Avinash Karumanchi from MOFSL. Please go ahead.
Hi, sir. Good evening. Congrats on good set of numbers. If you look at it like the improvement, this is the first quarter after eight quarters where you have seen an increase in volumes. Is it only regarding the GST cuts that you're seeing or how is it?
Hello?
Like before. Can you hear us?
Yes, sir, I can hear you now. Yes.
Sir, your line is audible. There is a background noise.
Yeah. It was both things. We are still an open footwear dominant player. Because of the season, Q4 and Q1 is bigger for us. Second thing was definitely GST, and thirdly, there was a good demand in the market.
Okay. Second thing, if I have heard it right, you have taken price hikes in the range of 18%-20%. Is this right?
Correct. 15 to 18.
Yeah. We have seen a similar situation in FY 2022 where we had to take a 20%-plus kind of price hikes, and that has impacted our volume significantly. Last time also, we argued that Relaxo maintains a six months of inventory of raw materials, while other organized players have maintained a lesser quantum. A little bit like cost for this right now.
This time we are cautious in buying raw material. We have not bought like what we did two years back. We are very cautious in buying and passing the price to the consumer. We are watching the trends, what is happening in the market, and it is across industry, footwear industry. All the players have taken the increase of prices. It's not only Relaxo.
Last time, raw material prices hiked was very steep. It went from INR 100 to INR 300. This time it is there, but not that, I think, high level. Things are settling also. It is, I think, almost coming down every day.
Still we have to be watchful of it.
Yeah.
The global scenario is not.
Even today, I think things are settling globally also, but it will take time. Let's hope things should be much better, but we don't see a repetition of last time what happened.
Okay. If things normalizes, then you'll be rolling back these price hikes, right?
No, I don't think there is any possibility. The raw material will soon settle down. This price increase will remain.
Okay. I'm not asking from the next quarter's perspective or something in that sense. If you look at next two years or three years, how should we look at the gross margins? Hello?
Gross margin, definitely we will try to improve overall. We have to be very cautious about passing the cost to the consumer. We have to be competitive. We have to see the competition also. The gross margin, definitely intent is to improve and overall operating margin should also improve. That's what we are trying. It will be a journey on the betterment side.
What would be the levers of that improvement? That's what I'm asking you.
Like we have discussed before, we are going to open 100 new outlets this year, and we are going to change our product mix. Plus, there will be some more addition in terms of distributors and retailers. Lot of action we are going to take to at least grow the market and margin.
Okay, sir. Congrats on the way ahead. I'll join the queue.
Thank you. The next question is from the line of Shraddha Kapadia from SMIFS Ltd. Please go ahead.
Hello, am I audible?
Yes, ma'am.
Yes.
Yes, ma'am. Yeah.
Right. Congratulations on good set of numbers. Recently, and right now also, you mentioned that there is an increase in focus on the women and the kids category. If you could let us know the current contribution and the medium-term target which the management has for the same.
Can you repeat the question?
There is more focus on women and the kids category, current contribution and the medium-term target.
For us, men's contribution is 70%, 25% is ladies, and 5% is kids. Our more focus will be on ladies and kids to improve this percentage. Right now it is quite low, but definitely it's going to improve.
Sure. Thank you so much. Similarly for the premium products also, if you could help with the current contribution.
We were playing at INR 999 in sports shoe till INR 1,800. This time we have rearranged our portfolio, and we are going to launch more products starting from INR 999 without leaving that base till INR 2,800 MRP. I mean to say, can't say exactly what number contribution we'll get from the premium portfolio.
Okay.
It's too early to say upon that.
Okay. Sure. Thank you so much. I'll join back in the queue.
Thank you. The next question. Sorry, the line got disconnected of the participant.
Hello.
Hello, Sameer sir, can you hear me?
I can hear you.
Yeah. The next participant is from the line of Sameer Gupta from IIFL. Please go ahead.
Hi, sir. Just a follow-up. 15% price hike, just wanted to understand the thought process. When I look at our inventory, we have 75 days on sale, so that will translate to around 150 days on COGS. Aren't we a little early in taking sharp price hikes? Because if I look at the competitors, let's say Bata and Red Tape and Metro, we haven't seen any major price hikes announced over there so far. One, do you foresee a volume impact in the near term? Let's say volume growth momentum will moderate substantially, might even decline in the coming quarters. Do you foresee that? Two, just wanted to understand the urgency in taking price hike, sir.
There were two reasons what we have mentioned before. One was the raw material, which shot up like anything in the month of April itself. Secondly was the wages. The increase in Haryana, the wages were more than 30% increase in the wages. They were the two reasons that we had to take the price increase. Regarding the raw material, definitely we are seeing that raw material is now softening. The wage increase, we don't think it will come down. The cost pressure will be there in terms of the price hike cannot be taken back. Secondly, it depends upon the other players which state they are operating from. We cannot comment upon that, what is the type of wages they had. Raw material it is across.
Got it. Let's say when you're saying RM will soften, the wage cost is still much higher. Do you foresee taking price cuts or increasing trade discounts if the raw material were to come down significantly? Else you will see a margin expansion, right?
We are closely monitoring the market, how the uptake will be in the market. It's too early to give any guidance on this.
Fair sir, got it. That's all from me.
Thank you.
Thank you.
A reminder to all the participants that you may press Star and One to ask a question. The next question is from the line of Shraddha Kapadia from SMIFS Ltd. Please go ahead.
Thank you so much for the opportunity again. Sir, if you could help us with any future guidance for modeling purpose revenue as well as the margins, considering this is the quarter in many times that the company has reported such a good number of growth. Thank you.
Can you repeat the question, please, Shraddha Kapadia?
Any future guidance?
Outlook, we are confident. Definitely we'll sustain what we performed in Q4. Definitely geopolitical situations are so uncertain. It's tough to give a very solid statement. Still we are very confident we will maintain and definitely intended to improve our margins. Growth will come. There is a price increase. Volume, we have to maintain that also. We are watching all the competitor, internally, geopolitical. We are confident. Definitely last two quarter, if you see, Q4 is much better. Things have started coming up. Consumer sentiments are also not that down. GST is helping us. Overall our treasury and overall balance sheet. So many factors are favoring us. We are very confident future, at least near future should be, I think, a good one.
Sir, any numbers if you could help us to quantify?
Quantifying, the last year we maintained operating margin of around 13.8%. That is a full year. Q4 was much better. We don't expect Q4 will be repeated, definitely. We intend to do better than last year's overall operating margin, which is 13.8%. It should be better, maybe 1% plus. That is the intent, definitely. We are trying to.
Sure, sir. Thank you so much. Anything, if you could highlight majorly on the GT, since you have mentioned that the GT has helped grow. Any changes or anything which you have witnessed?
In GT, what we have seen is that there is recovery of demand in quarter four, and it is going to continue what we are seeing. We are closely monitoring after the price increase, how the consumer reacts. We are keeping a close watch and let's see. We have changed the product mix also. We launched some products in different categories, not to leave the earlier price point also.
Okay. The newer would be the higher price points like you already mentioned.
Correct.
Okay. Sure. Thank you so much.
Moreover, we have-
Yes.
Moreover, we have planned for expansion in our own EBO model. We intend to open 100 stores. That is i think, plan, we are doing some new format and new redesigning of the stores with new good experience. We have done one trial, getting good response. After that we are very confident good footfall and good return, profitable return should come from that segment. On the e-commerce side also, we are working. A lot of things we have done, lot of growth we expect that will come from that channel. These are, I think, new initiative will add lot of growth. We are confident things should be better.
Sure, sir. Since you mentioned the EBO, is there any target like tier 1 cities, tier two and three cities? If you have any plans or if you could help us understand more about the same.
Now we are going to open outlet across India. Like earlier it was basically north and east-based. Now we have identified some gaps in west, and going forward, definitely we will enter southern market also, seeing and understanding the consumer preferences. Yeah.
Okay. Sure. That was quite helpful. Thank you so much, and all the best for future.
Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Yogesh Bhatia from Sequent Investments. Please go ahead.
Hello. Sir, congratulations on good set of numbers. I have a couple of questions. My apologies, I joined the call late. Can you explain the reason why margins were higher in this quarter? Is it some specific inventory gain or you've taken price hike and that's why we don't expect this to sustain? What is the reason?
Your question is why the margin was higher in quarter four?
Yes, sir.
There are two, three reasons for that. One was that lot of back-end work is done in the plant to reduce the cost. Secondly, our volume has grown a lot, so the fixed cost remains same. The contribution has increased because of the volume and value. Plus we have curtailed or reduced the discount given in the market also.
There is no inventory gain or anything of that sort?
We have taken a small increase in quarter four. That is also one of the reason of improvement in margins.
Okay. Sir, my second question was, we mentioned somewhere in the call that we plan to set up 100 new EBOs. Can you explain us then what is the timeline to do this network expansion? As of now, how many EBOs do we operate?
As of now, we have around 400 plus EBOs, but with new designs and new format we have started. We did one trial, so we are very aggressive. In first half, we will be able to open at least 30%-40% of the 100. By December, most should be ready. That is the intent.
In this 400, we will add 100, or this 400 maybe we will redesign and the number will remain still 400?
We will add new 100 and 400 will continue with the same format, and we will change some, but all the 100 will be new ones.
Okay. Sir, my last question is, last year our volume has been more or less flat. 175 crore pairs versus 175 crore pairs. Q4 versus Q4, the volume is significant. I wanted to know what do you feel about volumes in the next plus years?
I'm sorry to interrupt, sir. Your voice is echoing a lot, sir.
Sorry. Hello. Sir, can I repeat the question now?
Yes, if you wish.
Yeah. Sir, I was saying that last year to this year, our volumes have more or less remained flat, this quarter we've seen a significant jump in the volumes. I wanted to know what do you feel about the volumes for the next two years? How do you see that happening? Not very guidance, qualitatively, what do you feel about volumes? Secondly, do you think that the mix will change significantly for Relaxo or the price range will remain at INR 155, INR 160 per pair going ahead?
Yogesh, it's a journey. For increasing ASP is going to take time, but definitely we are focused towards premiumization. We are changing our product mix. It's going to take time to see the impact in ASP.
It's not a short term, it's a long term phenomenon. Every year we are going to increase our ASP.
With EBO expansion and e-commerce growth, which we are foreseeing, so ASP will improve definitely.
Yeah.
I think GT, there will be a pressure, but on these two channel, due to premiumization is going to happen and it will increase overall ASP at company level.
Correct.
Right. Sir, what do you feel about volumes for the next two years?
Next two years, I think we have to be cautious. Intent is there again, around, I think 4%-5%, definitely we want to grow our volume. Price increase we have already taken, let's see how it impacts. Overall, we want to grow at least 4%-5% in volume with product mix.
Sir, our EBO expansion is 25% right now. I don't think volume expansion can only be 4%, 5%, because our network is only expanding 20%, 25%.
Agree, EBO business is not that great. In our overall kitty, it's around 10%. If we increase their 25%, it's a high-value item, so volume will increase definitely, but not to that degree. Overall, at company level, when you are talking 4.5, it's a INR 17, 18 crore pair we sold last time. That's going to be not that easy, but definitely we intend to.
Okay. If I may ask one last question.
Yeah, please.
Sir, can you please give me the breakup of our network? Like how many EBOs, how many NBOs touchpoints we have? What is the breakup for that?
We have mentioned in our investor report also that we are currently supplying to 70,000 outlets, that's NBO outlets. Our own outlet, EBOs, are 420 outlets. These are our own. We are available in e-commerce platform. We started with now quick commerce also, being present in Blinkit and Zepto, where we are getting a good response. We are exporting to 37 countries.
Okay. Thank you, sir. That will be all.
Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Archana Gude from IDBI Capital. Please go ahead.
Hi, sir. Thank you for the follow-up. Sir, I have two bookkeeping questions. Can you help me with the revenue contribution from Sparx, Bahamas, Relaxo and Flite in FY 2026?
We have three major brands. Our contribution in Sparx is around 40%, Hawaii is around 25%, and Bahamas is Flite.
Yeah.
Yeah, it's 35%. Yes. This is the ratio among all the three major brands.
Right. Sir, how has been the Sparx journey in last four, five years? Any major category which you feel is really supporting the margin expansion more than the top line can be looked at? Any other thoughts on which has been really helping us at margin level?
There is a good demand coming from sneakers and sports shoe category, which we think has a great future ahead. Plus, we are going to focus more on ladies and kids category, which currently is contributing less but has a good future.
Correct. Right.
Yeah. Our focus is more on those.
Correct. Sir, in terms of ad expenses, what was the amount in FY 2026, and how do we see for coming year?
Sorry, can you come again?
Ad expenses.
Ad.
For full year FY 2026.
Our expenditure is roughly around 4%-5%, and it varies between brand to brand, whatever the requirement is. Secondly, a big expenditure is also on performance marketing on platforms like Amazon and Flipkart.
Correct.
That depends upon, again, brand to brand.
We'll continue to see the same kind of ratio, 4%-5% of net sales for 2027?
Yes. Correct. We try to maintain what we are going to spend on advertisement.
The spend will be like this, but we are changing, I think, overall digital strategy and also so many things.
Sir, that is there, that the focus will be now more on digital front.
Right.
As you have seen, the customer is moving from television to digital. The spend is also accordingly going to shift towards those medium where consumer is present.
Right, sir. Sure. Sir, thank you and all the best, sir. We look forward seeing good numbers like what we delivered in Q4 going forward.
Yeah. Thank you.
Thank you. The next question is from the line of Sameer Gupta from IIFL. Please go ahead.
Sir, just one follow-up. This 100 EBOs that you plan to do, our INR 180 crore-200 crore CapEx guidance, does it include the CapEx for these EBOs?
In our case, spend is not that great. That is inclusive, by large inclusive. We are going to spend around INR 30-35 lakhs per store, not more than that. If you go for 100, it will be INR 30-35 crore. That's all. Not a big spend. That's part of INR 200.
Got it. Given there will be retailing costs in the first few years, there will be a margin dilutive impact also. Given that you have also guided for 100 basis points expansion, this is despite the retail expansion, right?
Yes, definitely. Because we have done trial also. There is a good footfall, good response, high-value product we are able to sell, and we have gone with exclusive article for EBO in addition to our GT. Margins, we have already expanded our margin in these stores. We don't see much pressure will come on the overall margin, and we are expecting the 1%, which I referred, will be maintained at company level.
Sure, sir. Thanks, and all the best.
Thank you, a reminder to all the participants that you may press star and one to ask a question, a reminder to all the participants that you may star and one to ask a question As there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Thank you, Sameer. Now this is all from our side, and we thank you, all of you, for joining the call. Looking forward to speaking with all of you again in the next call. Thank you.
Thank you very much, members. On behalf of IIFL Capital Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.